How Jeffrey Epstein led to fallout at Apollo Global Management
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Jeffrey Epstein was a key reason for tensions at the top of Apollo Global Management that recently spurred the exit of two of its three remaining co-founders — and the awkwardness began a decade ago, The Post has learned.
It was in 2011 that billionaire Leon Black — who on March 22 revealed he was stepping down from the helm of the giant buyout firm sooner than expected amid controversy over his Epstein ties — first floated the idea of working with the now-dead pedophile to his fellow co-founders Josh Harris and Marc Rowan, according to sources close to the situation.
That’s despite the fact that Epstein had been convicted three years earlier for soliciting prostitution from a 14-year-old girl. In the meantime, Black had continued to associate with him — and was prodding Harris and Rowan to hire Epstein to do some work for them and possibly for Apollo, according to the sources.
“Leon affirmatively recommended Epstein — it was more than a passing comment,” one source said. “He wanted Apollo to hire him.”
Harris and Rowan — repelled by Epstein and concerned about damage to Apollo’s reputation — said no, and the conversations never advanced, according to the sources. Nevertheless, tensions between the co-founders over Epstein — particularly between Black and Harris — persisted, and became a key issue as Black announced his surprise exit from the firm in March.
Last week, Harris said he was exiting the firm, leaving Rowan, the sole remaining co-founder, to serve as chairman and chief executive.
“These assertions, made by an unnamed source, are completely untrue,” said a spokesman for Black.
“Apollo never discussed or considered hiring Jeffrey Epstein,” an Apollo spokesman said.
According to sources, however, Black had been pitching Harris and Rowan on Epstein’s prowess when it comes to tax- and estate-planning — the same services for which, it was revealed earlier this year, Black had racked up an eye-popping tab of $158 million with Epstein. Beyond that, insiders said Black was signaling that Apollo might hire Epstein as a consultant on investments — or possibly enter into investments with him, the sources said.
Black, despite being turned down by Rowan and Harris, “doesn’t like taking ‘No’ for an answer,” according to a source briefed on the situation. And for years he continued to float doing various projects with Epstein to his cohorts at Apollo.
That, in turn, helped heighten tensions between the three executives — particularly Black and Harris, who were locked in a rising power struggle as Harris steadily took on more day-to-day responsibilities running the $455 billion private-equity powerhouse, sources said.
“It’s been a slow burn between Josh and Leon since,” a source said. “Leon would bring Jeffrey [up] and he was rebuffed in ways big and small.”
Tensions over Epstein came to a head in January, when Harris demanded that Black step down over concerns that his Epstein ties would tarnish the firm, sources said.
In response, Black named Rowan his successor as CEO — a surprise move given that Harris had been taking on an increasingly crucial operational role while Rowan had been taking on fewer duties at the firm, according to sources.
An investigation by the law firm Dechert whose results were made public in January concluded that “while Black did not try to pressure his co-founders to use Epstein, he did positively comment on the substantial value of Epstein’s services and, at Epstein’s repeated request, did try to introduce Epstein to his co-founders.”
“In the end, neither co-founder hired Epstein or consulted with him on their personal matters,” the report released Jan. 22 said.
While the report did not give a specific timeline for the disagreements over Epstein, “Dechert has also determined that Epstein unsuccessfully sought to pitch business opportunities to certain Apollo senior executives, none of which were pursued by Apollo or those executives,” according to the report.
As previously reported by The Post, Epstein was listed as a director on the board of Black’s charity, the Black Family Foundation, between 2001 and 2012.
At the time, Black’s reps insisted that Epstein had been listed as a director for the four years following his conviction solely because of a clerical error.
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